deducted from Production Cost
A cost that is earned by a corporation when developing a good or producing a service. Production costs combine raw material and employment. To figure out the cost of production per unit, the cost of production is divided by the number of units produced. A company that knows how much it will cost to produce an item, or produce a service, will have a flawless image of how to better price the item or service and what will be the total cost to the company.